Electric cars in an energy crisis: Lack of battery materials adds to troubles of green drivers

A potential increase in the number of electric vehicles in the years ahead is a genuine concern because of the difficulty in finding materials to make batteries, says a leading Operations expert.

While electric cars emit fewer greenhouse gases and air pollutants than petrol or diesel cars, they are about to become more expensive to run. Soaring energy prices mean that energy regulator Ofgem recently announced an increase in the cost of specific tariffs. This included an 84 per cent rise in the unit rate for electricity from October 1 – from 28p to 52p per kWh.

Electric car drivers will now be forced to pay considerably more if they charge their cars at the capped rate, with the expectation that prices will increase more in 2023.

However, Professor ManMohan Sodhi, a world leading researcher in Operations and Supply Chain Management, believes that there is just one problem facing owners and manufacturers. Questions continue about the environmental sustainability of electric vehicles and their affordability.

“Electric cars are being sold on the idea of being more environmentally sustainable and cheaper on a per-kilometre basis than fossil-fuel or hybrid cars, even though the initial cost is currently much higher. Both advantages are being challenged: Depending on what is included in the supply chain sustainability of manufacture and driving use, it is not clear which type of car is better. Likewise, the fluctuating prices of fossil fuels versus electricity make the economic advantage less clear. 

The problem is impacting more than just the UK and European drivers. The heatwave in California resulted in the State asking for residents not to charge their cars between 4 pm and 8 pm, just a week after announcing a ban on petrol-powered cars by 2030.

Moreover, the issue of sourcing battery materials poses an additional threat.

“Importantly, there is the fear of future shortages of materials for batteries — there may not be enough lithium to go around,” added the Bayes Business School professor. “The shortage of lithium, cobalt, and nickel is already being felt, even though electric car manufacturing is emerging.

“Companies like Tesla and Volkswagen are already considering going upstream into not just battery manufacturing but also mining because of this. One can only imagine if ten or twenty times more new cars were electric in the coming years.”

And while Professor Sodhi believes the energy crisis and the threat of materials shortages may not impact the number of drivers on the road, he does see an opportunity for hybrid and hydrogen automakers.

“The current crisis hasn’t called into question individual mobility, which is too deeply ingrained. Instead, there is again room for fossil fuel and hybrid cars, and increasingly hydrogen.  So far, only Toyota has a consumer vehicle fuelled by hydrogen – maybe that will change as auto companies hedge their bets against an increasingly uncertain future.” 

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